Greene King to put 150 pubs on chopping block
Pubs giant Greene King is considering selling 150 of its pubs and offloading dozens more to franchisees, as its managing director quits.
The pub operator, which has 2,500 premises in the UK, has said it will put around 300 of its managed pubs into a separate unit – with 150 of these intended for sale while the other half will be turned into leased, tenanted or franchise venues.
The pub sector has faced tumultuous times in recent months, as Budget reforms to business rates – intended to reduce the burden on retail and hospitality – ended up hiking bills for thousands of landlords.
Chancellor Rachel Reeves was forced into a £300m concession package, but recent fears of rising energy bills as a result of the war in Iran have meant pubs are yet to face sunnier prospects.
Nick Mackenzie, the company’s chief executive, said this move came in response to changing consumer habits and a “dynamic” industry environment.
This new business unit will allow the firm to run these pubs on a simplified model, allowing it to maximise profits, Greene King said.
The restructuring came as managing director Zoe Bowley stepped down from her role at Greene King, according to The Sun.
‘Dynamic’ operating environment
Mackenzie said: “We are confident that our new pub estate strategy will set us up to deliver sustainable profitable growth for the long-term as consumer habits continue to evolve and the operating environment remains dynamic.
“The realignment of our estate – which leverages our strategically important Pub Partners business – enables us to play to the strengths of our brands.”
The sites earmarked for closure represent fewer than two per cent of Greene King’s managed estate, the firm said.
Greene King had been weighing job cuts of around 100 roles in February, following a prior restructure in which the pub operator slashed jobs across head-office and field operations.
Greene King was bought by Hong Kong firm CK Asset Holdings in October 2019 for £2.7bn, but had previously been London-listed.
JD Wetherspoon boss Tim Martin warned last week that rising energy prices could push up the price of pints, and Shepherd Neame chief executive said the pub sector is bracing for higher costs.
On Tuesday, Martin hit out at Greene King for its campaign for business rates reform last summer, and scorned the pub firm’s historical decision not to back a campaign by French businessman Jacques Borel for a rethink of VAT for hospitality.
The Wetherspoon boss took aim at Greene King’s use of “jargon” and “excessive complication” in its campaign, telling his competitor: “keep it simple, stupid”.
Fears of rising energy bills come as employment costs are also on the rise, as retail and hospitality bosses warn hikes to the minimum wage and Labour’s workers’ rights reforms risk undermining the flexible labour which pub landlords often rely on.
As well as rising costs, the weather is putting more pressure on the hospitality industry, as a recent industry tracker found that sales across pubs, bars and restaurants were down 0.2 per cent in February due to wet weather.